Investor relations professionals at venture capital firms play a dual role. First, they need to keep existing limited partners up-to-date on the fund’s performance, and confident about the firm’s management. Second, they participate, along with the principals, in attracting new investors, through presentations and other communications.
Taking a disciplined approach to regular communications with current investors is crucial. In goods times, when the fund is performing well, it can lead to increased investment. In tough times, such as the recent economic downturn, the trust and good will built over time can convince investors to stick with their investments and your firm.
Investor relations takes on added importance when a venture capital firm seeks to exit an investment. An initial public offering (IPO), for example, triggers a host of new reporting requirements to inform not just a few dozen limited partners, but potentially thousands of new shareholders who are entitled to certain documentation.
The investor relations professional at a venture capital firm may advise the portfolio company at this juncture. Or he may oversee the hiring of an outside investor relations firm, which specializes in this type of work.
Either way, investor relations plays a big role in ensuring that the IPO has a broad base of support in the marketplace, and that the company’s stock valuation when launched truly reflects the potential of the business. The investor relations firm or manager will be developing company websites, press releases, procedures for financial disclosure, press kits, road shows, and a variety of other investor materials prior to and after the public launch of the company.
Today many public relations firms have divisions that specialize in this type of work for both private equity and venture capital firms. If you have an interest in communications and finance, approaching a PR firm’s investor relations department may offer you yet another avenue for eventually obtaining a job in the venture capital industry.
References:
Comments on this entry are closed.